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Question : The domestic country will have to spend more domestic currency to import foreign goods. Which effect of depreciation is highlighted here?
 

Option 1: Increase in exports
 

Option 2: Decrease in imports 
 

Option 3: Increase in the national income
 

Option 4: All of the above.
 


Team Careers360 25th Jan, 2024
Answer (1)
Team Careers360 26th Jan, 2024

Correct Answer: Decrease in imports 
 


Solution : Depreciation of a domestic currency means a fall in the price of domestic currency in terms of foreign currency, where more amount of money has to be spend to import goods.
Hence Option B is correct.

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